Weekend reflections

It’s time again for weekend reflections, which makes space for longer than usual comments on any topic. In keeping with my attempts to open up the comments to new contributors , I’d like to redirect discussion, and restatements of previous arguments, as opposed to substantive new contributions, to the sandpit(s). In particular, please post nothing related to nuclear energy. As always, civilised discussion and no coarse language please.

23 thoughts on “Weekend reflections

  1. I suppose we can all consign Keynesian theory to the scrap-heap. The current economic crisis crossing our screens is nothing less than the precise collapse predicted by Marx, and only Marx. All that Keynes (and acolytes) could offer was (publicly) ‘stimulus’ and (privately) ‘wage cuts via inflation’.

    Keynes knew that unions would fight orthodox wages cuts and Marshall had proposed protecting wages value through indexation. So how to protect capitalism. Keynes’s answer was wage cuts by inflation. As he privately told the Macmillian Committee (according to Alex Millmow); “… a real wage fall was best expedited by prices rising and wages remaining steady”. The workers could also be fed the hoary old sop of “social wage” to encourage wage cuts – see Millmow , pg 14f etc.

    Keynesianism means – protect profits by wage cuts not by politics but by “tricks and treats” sleight of hand, and subtfuges (eg National Economic Summits, EPAC machinery farces, and of course the Prices and Incomes Accord that never tackled prices).

    But the Bank of International Settlements has always known that debt was leading to crisis. As Pettifor cited in her 2006 book “The Coming First World Debt Crisis” in 2005 the BIS said:

    “Growing domestic and international debt has created the conditions for global economic and financial crises” [pg1].

    Pettifor wrote her book in 2006. She is about to do a well-earned victory-lap through Australia organised by the SEARCH foundation (which is in essence the only useful thing SEARCH has managed to do). There will be a public forum on 8 September at Tom Mann Theatre, Sydney.

    Pettifor’s Chapter 2 is well worth re-reading.

  2. Old Karl was on the ball, alright. He understood the eternal psychology of the parasite, the insatiable desire for ‘More’. The mechanisms he got right, also, in as far as his 19th century milieu would allow, I would say, knowing about as much Marxism as the next person (who’s snoring). What a pity he’s not around to help us now. I think, as a pure economic dilettante (perhaps that should be dill-etante) that the fall in the rate of profit, and the move by the capitalists into financial speculation rather than investment in production and the preference of rent-seekers to search for the highest rate of return, which means gambling, and, inevitably, rigged games, have all played out as expected, indeed as predicted, by numerous observers. This crisis is, I would say, irrevocable, unless a Jubilee be declared and all debts nullified. Of course the banksters will fight that to the bitter end. Much better, much more psychopathologically rewarding, to go on looting the poor world, at the point of a Hellfire missile, push China into a corner and pauperise and, -yes!-immiserate the plebs at home. Debt peonage for the proles-sell a kidney or half your liver, but get in quick before supply overwhelms demand. There’s no way back now. It’s socialism or a short-lived barbarism amidst ecological catastrophe. What an amazing and awful time to be alive! What a pity Paddy McGuinness is missing it.

  3. This crisis is, I would say, irrevocable, unless a Jubilee be declared and all debts nullified.

    Been saying this for the last 3 years. Forgive all debt, mine, yours, everyones.
    But, I hear you say, what of the poor self funded retirees?
    Well their investments are being trashed just as my super is.
    The people that it will hit hardest are the rent seekers and parasites. ie: those that got us into this and who still seem to doing very nicely thankyou very much.

    Bring it on I say!

  4. I am always cautious of movements where some of the acolytes claim an infallible prophet. Leaving aside religion (I don’t want to start that bunfight here), this means maintaining a critical stance against significant aspects of Marxism, Freudianism and Capitalism (for example).

    Having said that, I have to agree that Marx had better insights into Capitalism than anyone since and including Adam Smith. Imperialism and Capitalism (which always go together) are continually in public denial about their own oppressive and exploitative essential nature. Though I am sure the top plutocrats know exactly what they are about.

  5. @Marisan

    Well, I better get into leveraging heavily and quickly. But then there are a lot of bright people in this world who may come up with a less coarse mechanism than yours. Incidentally, do you intend to shoot nominal pensioners (defined as people who are not self-funded retirees but would qualify for a pension under current laws with the difference being that the pension would no longer be a strictly positive amount but zero)?

  6. Not a long comment, but I am curious about that lack of presence of our deal opposition leader; where is he?

  7. @Chris Warren

    The current economic crisis crossing our screens is nothing less than the precise collapse predicted by Marx, and only Marx.

    Given that this claim has been made during every economic crisis of the last century or so, I think the prudent course of action would be to hold off a while before declaring the ‘final crisis of capitalism’.

  8. Chris Warren, you seem to be an expert on Karl Marx. Did he predict the collapse of communism, and, if so, did he predict this event to happen before or after the collapse of capitalism?

  9. I always like to use Russia as a demonstration of the superiority of capitalism, or at least the neoliberal form as opposed to the mixed economy.

    A demonstration of the efficiency of capitalism is that it took seventy years for the collapse of communism in Russia and only took seven years for capitalism to collapse.

  10. @Tim Macknay

    Marx’s crisis theory was not restricted to “the final crisis of capitalism” (your fabrication).

    If the population is pumped-up, and/or workers and pensioners are forced to work longer for less and take their doses of austerity and Keynesian cuts – capitalism will survive, until the next, more formidable, cycle. These things all ratchet-up until the inevitable conclusion.

    However, climate change may hit the globe first.

  11. Ernestine Gross :
    Chris Warren, you seem to be an expert on Karl Marx. Did he predict the collapse of communism, and, if so, did he predict this event to happen before or after the collapse of capitalism?

    You are paddling in the wrong direction. Marx described how primitive communism was overthrown by slavery and fuedalism. There does not appear to have been any other collapse of communism in history. Maybe Lenin’s New Economic Policy may have ended up if it had been given a chance.

    The nearest to Marx’s conception was of course the Yugoslav self-management and associated labour. This was destroyed by a two-pronged attack from the West, plus a rather strange internal tendency by some Yugoslavs to borrow international funds to boost growth.

    Marx never predicted the collapse of communism (or market socialism) due to its own structural tendencies. He probably knew that capitalism would not permit socialism to coexist anywhere within reach. But economic warfare is not a sensible basis for imputing another form of ‘collapse’.

  12. Chris Warren, prediction relates to events in the future, not to the past. I gather the answer to me question is “no”.

  13. @Chris Warren
    Fair enough. However, it seems to me that there is more than one theoretical explanation for the current crisis. If you want to show that this is a Marxist crisis, as opposed to some other sort, you need to do something more than simply assert it.

  14. Tim, surely this a multi-dimensional crisis. At least eleven dimensions all bundled up into pieces of cosmic string, on which ‘the authorities’ are now pushing, with predicted results. You could say it was a crisis predicted by Marx. Or inherent in Adam Smith’s ‘Vile Maxim’ of the rulers of mankind -‘Everything for me and nothing for anybody else’. All the great religions and philosophies denounce greed. The monotheisms used to outlaw interest, and the Moslems still do. The Jews, following the Babylonians, used to have a debt-forgiving ‘Jubilee’ every 50 years, And, as the crisis is essentially caused by greed, egomania and contempt for others, the various schools of psychology must have their say. And ponerology, the study of moral evil, once an ecclesiastical concern, has latterly been applied to politics, which is a wholly owned subsidiary of economics in the West. I dare say that poor potty training, attachment difficulties as a newborn and Murphy’s Law might make credible contributions as well.

  15. @Tim Macknay

    Well I think it is obvious – the key symptom is too much debt/credit, but the structure of capitalist profits itself requires increasing per capita debt (or falling wages).

    If the capitalist structure of profits did not exist – there would be no need for long-run increases in debt – therefore no crisis of the current kind.

    If the crisis was caused by any other mechanism eg: war, climate change, social changes, overpopulation, errors by central bankers, then it would not be a Marxist crisis.

    As it is caused by the last 100 or so years of capitalist debt ratchetting (particularly in USA) then, by definition, this is a Marxist crisis. You won’t find the form of current past 5 years of credit crisis (2007 – 2011 incl) described anywhere in Keynesian texts such as Samuelson etc [Earlier for Japan]. They all assume you can adjust levers to ensure permanently rising wealth and incomes for all – the opposite of Marxism.

    So what are you asserting? That we are living in the best of all possible worlds?

  16. Austerity is certainly not for the very well off. Increasing tax rates on the very well off is permanently off the table.

  17. Fran, aside from the staggering display of Dunning-Kruger-Joyce idiocy and ignorance, you know with Madam Fraser that you are dealing with a hard, hard Right ideologue, just like 90% or more of ‘The Fundament’s’ blatherers. I remember her touching paean to Frank Devine’s alleged virtues on the occasion of his ascent to glory. She coupled the praise with fond reminiscences of that other monument to evolution, B.B.Malignus, who like Devine is, on most recent reports, still dead. The Fundament’s ideologues know exactly what they are expected to believe, ie anything opposed to the Left, no matter how stupid, ignorant or credulous they might appear. And they are writing for an audience with utterly closed minds who are looking for nothing but reinforcement. You can tell’ em one hundred million times that Plimer et al’s volcano emissions ‘inaccuracies’ are wrong, 30,000 times incorrect, but it will never, ever, have any effect. And as long as this type and their leaders like Abbott dominate human society, we are doomed to extinction within a century at the outside. When that reality finally penetrates enough crania, it will be on for young and old and it will be ugly.

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